In a 3-quart saucepan, heat the olive oil and butter over medium heat. Add the carrots, celery, red bell pepper, onion, and garlic and cook until tender, about 10 minutes (longer is OK). Add the spices, balsamic vinegar, and red wine.
Add tomatoes and tomato paste. Bring to boil and then reduce heat to low. Simmer uncovered until the desired consistency is obtained and then cover. Stir the pot every 30 minutes or so. Simmer for at least 2 hours. Add sugar a few minutes before serving.
The sauce can also be used in lasagna or manicotti.